Market watch: Stocks fall as early gains wiped out

Benchmark index decreases 104.19 points to settle at 36,663.38

KARACHI: The KSE-100 index fell in a volatile trading session on Tuesday despite hitting a high of 571 points in early hours.

Mixed investor sentiments came following finance minister’s assurance to representatives of stockbrokers that the government would rationalise the capital gains tax. Moreover, the expected IMF bailout package would be taken up in parliament in the coming session, which also left an impact on the market.

At close, the benchmark KSE 100-share Index recorded a decrease of 104.19 points or 0.28% to settle at 36,663.38.

Elixir Securities’ analyst Murtaza Jafar said the benchmark index showed wide swings with intra-day movement of 848 points. Engro Corporation (-1.21%) traded under pressure after the finance minister directed the petroleum ministry to review the LNG terminal agreements, he said.



International Steels (-2.90%) announced its 1Q FY19 result, posting earnings per share (EPS) of Rs1.93 per share, down 16% year-on-year. Cherat Cement (-0.71%) also announced 1Q FY19 result, declaring EPS of Rs2.44 per share, down 29% year-on-year.

“Technically speaking, 36,200-36,500 remain the major support areas, however, any break below this will take the index to 34,600-35,000,” Jafar said.

JS Global analyst Danish Ladhani said the index closed at 36,663, down 104 points, after trading higher in early hours, touching the day’s high of 572 points as investor sentiments improved in anticipation that the tax recommendation made by PSX association members to Finance Minister Asad Umar would be accepted.

Oil and gas exploration companies swayed the market as oil prices rose in the international market on the back of decline in crude exports from Iran ahead of sanctions against Tehran, he said and added commercial banks and cement companies simultaneously dragged the market down.

“Moreover, two key factors - macroeconomic situation and the possibility of exclusion of main stocks from the MSCI Emerging Market index - may set the market’s direction in the future,” he said.

Index-heavy Habib Bank Limited (-1.68%), United Bank Limited (-2.81%) and Lucky Cement (-3.33%) were the major laggards.

Traded volumes slightly increased by 10% to 182 million shares while traded value decreased to $41 million. Top volume stocks were The Bank of Punjab (+5.81%) and TRG Pakistan (-5%).



“Moving forward, we expect investor sentiment to remain choppy on the back of economic uncertainty,” the analyst said. “Therefore, the KSE-100 will remain under pressure along with selling pressure from foreign investors.”

Overall, trading volumes increased to 181.7 million shares compared with Monday’s tally of 165.5 million. The value of shares traded during the day was Rs5.45 billion.

Shares of 375 companies were traded. At the end of the day, 167 stocks closed higher, 190 declined and 18 remained unchanged.

WorldCall Telecom was the volume leader with 36 million shares, losing Rs0.07 to close at Rs1.53. It was followed by The Bank of Punjab with 12.2 million shares, gaining Rs0.58 to close at Rs10.56 and Aisha Steel Mills (convertible preference shares) with 10.99 million shares, losing Re1 to close at Rs11.2.

Foreign institutional investors were net sellers of Rs573.8 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.